Nope. They don't own anything. They have it licensed to them from "Middle Earth Enterprises" a company owned by Saul Zaentz. The actual copyright and intellectual property of the books is still in the hands of the Tolkien family.

Just give them a middle finger response. They have movie rights and game rights licenced to them for Tolkien's work but that doesn't mean they own it wholesale. They can't stop you from making a non profit mod because you were inspired by a book you read. If they had any sense they'd hire you and make you do all the work making a good game as opposed to the rubbish ones they've released with the "Intellectual property." Keep at it until Christopher Tolkien personally sends you a cease and desist.